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Optiv Canada doubles size with Conexsys acquisition, as part of major Canadian expansion

Cybersecurity giant Optiv has been building up the skeletal presence in Canada that existed when the company was formed in 2015. They have made Canada a priority, and with the integration of Conexsys, raise the size of the Canadian operation to 48 staff – up from seven two years ago.

Cheryl McGrath, Optiv Canada’s General Manager

2015’s coming together of large security solution providers Accuvant and FishNet as Optiv Security created a cybsersecurity giant in the U.S.. At the time, their presence in Canada was extremely limited however. Since then, Optiv has added resources in Canada and made expansion here a priority, as part of a strategy of growing the company globally. The recent acquisition of Mississauga-based Conexsys doubled their size in Canada. Last week, Optiv made another acquisition, Decision Lab, which will also have implications for their Canadian operations.

“Before Optiv was formed, there was an Accuvant office in Canada, which partly did fulfillment for US-based subsidiaries,” said Cheryl McGrath, Optiv Canada’s General Manager. “At that time, they had three employees. There was some presence outside the Golden Horseshoe, and at one point there had been salespeople in Vancouver and Winnipeg, but not then.” FishNet had no presence in Canada at all.

When venture cap firm Blackstone acquired both companies in 2015, with former Accuvant CEO Dan Burns becoming Optiv’s CEO, international expansion was a principal strategic objective, and the company deliberated how Canada fit into that plan.

“Because growing internationally was a strategic initiative for Blackstone, the board took up the issue of what they wanted to do in Canada first,” McGrath said. “The company spent 3-4 months talking with customers and employees in Canada, on the question of whether Optiv should invest in Canada, or be here at all. In March 2016, expansion in Canada was approved and I was brought on board.”

McGrath was tasked with operationalizing the general objective for growth.

“We began a strategy of building out brand awareness in the market, which included attending industry events, and doing some media work to build the brand,” she said. “We also determined specifically how we would go to market, and where we wanted sales and technical people. We added additional resources with salespeople in the Greater Toronto Area, one in Ottawa, one in Calgary and one in Winnipeg, and we added some solution architects as well. We created some verticalization specialization. For example, one person focuses on insurance, to have a fuller understanding of the issues customers face in that market. We also looked closely at the partners we wanted to work with, that would provide us with the greatest leverage.

Addressing the services market was a top priority, and Optiv Canada had an advantage here over the parent company.

“Optiv in the U.S. started out as a hardware and software reseller, which was the norm in the industry then,” said Peter Evans, Optiv’s CMO. “Like much of the industry, Optiv has been transitioning to a services-led model, which is what customers want. Today in the U.S., services are about 25 per cent of Optiv’s revenues. In Canada, however, services are 80 per cent of the business. Optiv Canada, being much newer, didn’t have that legacy business, and could start with the right sets of services around what the market is focusing on.”

The acquisition of Conexsys accelerates Optiv’s growth significantly. The company had grown to 23 people before this deal, and now has effectively doubled in size, to 48.

“Conexsys started in 1959, and morphed their business over time,” McGrath said. “By the early 2000s, they were a network company, when they added security. Now they are about 96 per cent cybersecurity.”

McGrath said Conexsys adds capabilities that go beyond simply doubling the number of resources.

“They have a very strong bench of technical resources around companies like CyberArk and Check Point,” she said. “Their government business is also very strong, both federally and provincially.”

McGrath said that she had spent the last week meeting with Conexsys customers and employees, and said the reaction to the deal has been strong.

“They are pleased with the blend of the cultures, and see a lot of commonality,” she indicated.

Conexsys decided to sell because they had determined that their business had reached an inflexion point where they either had to expand themselves, or sell.

“Michael Yassin, their President, told me that they were working with 15 partners, and they knew they had to expand that, as well as their services offering,” McGrath said.” That would have required making acquisitions of their own. So their choice was to expand, or be bought.”

Last week, Optiv made another acquisition, U.S.-based analytics company Decision Lab, which will significantly improve their ability to serve customers.

“Today, the number one issue for customers around their security infrastructure is fatigue and frustration,” Evans said. “They have made investments in security tools, but many of these haven’t been implemented correctly, and it has been hard to assess this because of the difficulties in determining a measure of success.’ Decision Lab applies Big Data analytics to security information, to help customers decide what tools they need and which they don’t.”

Optiv had been doing something similar before, but Evans said that Decision Lab is best of breed.

“We had been building intellectual property around siloed security tools and building out SOCs,” he said. “Decision Lab is a next step up on that. We really liked what they were doing with their analytics tools.”

“This fits into our focus on how to integrate tools from a services perspective,” McGrath said. “This will add to our traction for services work and consulting work in Canada. Combined with the fact that we have access to about 40 CISOs who now work full-time for Optiv, we can help plan with CISO offices and figure out which tools they can best optimize.”